The Mad Dash

July 11, 2013

Once again, we’ve recently been treated to a series of breathless articles claiming that in-car radio is doomed. The writers point to “proof” such as the increase in Pandora’s in-car listenership, or the oft-quoted tech researcher’s false pronouncement that auto makers will drop dashboard radios in the next five years.

Much of this overheated rhetoric is, of course, self interest and spin. It harks back to the river of ink spilled when satellite radio was going to rule the world. So, what’s real and what’s a radio manager to do?

First, a few common sense facts to remember.

Broadcast radio, along with all forms of media, is in a disruptive phase. Simply, this means that NO ONE knows how this evolution will turn out. Opinions are many times a product of past experience, which is not a good guide in this environment. Prophecy is a dangerous occupation.

The auto makers who are focusing so completely on the technology of the connected car do not have deep history or experience with software, the user experience, or consumer tastes and trends in audio entertainment. They are in an early phase of a process that will take time to find its focus.

The wireless providers are vitally interested in finding a way to get a piece of the financial action that will flow from the connected car.

The consumer electronics makers who supply both car makers and the auto aftermarket want their piece of the action as well; more complexity means more revenue for them.

Today, the dashboard is experimental and proprietary to each car maker. Today’s consumer is confused by complexity and new functions as they move from one new car to another. Ford, one of the most innovative automakers, is considering the return of some rotary knobs to the dashboard, based on feedback from consumers that their first generation Touch system was too confusing.

Apple has been eyeing the dashboard with the creation of its iOS for the Car, a deeper integration of their iPhone technology into the dashboard. Will Silicon Valley or Detroit win out for the ultimate control of the digital dash? Will it be an extension of our smartphones or will it be a separate dedicated system? The simple fact is that it is too early to know. And remember that the life cycle of a car, from design to market, is far longer than the rapid-fire pace of electronic innovation. As technology pushes engineers forward, consumers migrate at their own pace, choosing to embrace innovation when it meets a need or makes their life substantially easier.

With that context, we know that in-car listening is a vital battlefield for radio. For some stations, fully half of their total listenership comes from in-car listening. But this is an environment that we have shared with other forms of audio entertainment for some time. Whether CDs or cassettes (or even 8 tracks), there have been alternatives for in-car attention. That competition increased with the first connection a driver made between their iPod and their dashboard radio. Free trial subscriptions to satellite radio in new cars have been slowly making inroads into some listeners’ drive time habits. But overall, radio has fared well, maintaining its relationship and audience loyalty by focusing on the local information and human connection that has been the long-standing choice for drivers everywhere.

As choices multiply, so does media usage. While there is fragmentation and competition, traditional media brands have not disappeared, but rather adjusted. In some cases, such as newspapers, they are transforming themselves. What has disappeared is outdated or insufficient delivery technology. Online audio may, in some future time, displace broadcast AM/FM, but there are still enormous technical and acceptance obstacles to overcome. In the meantime, radio is busy extending and transforming our brands for the new multichannel world.

So, in a world of shiny new objects, it is natural that consumers will try new offerings. It’s equally as true that they will adopt or reject them based upon their own criteria. The manufacturers’ current focus is on tech rather than the customer’s priorities and desires. Do we really want a car that can read back the boss’s e-mail on the way home? Or are functions being offered just because the technology can be made to do it?

All of this brings us back to the mad dash to the digital dashboard. Who will win? What form will it take? Who will you pay for the techno marvel of turning your wheels into another intelligent machine for living? Only a fool would try to predict the outcome, but hundreds of millions of dollars are at stake.

The only reasonable way forward for radio is to make our brands available as many ways and places as possible and to remain engaged and nimble as the landscape changes. But more importantly, we need to maintain a disciplined focus on our product’s unique appeal. We are a live, local friend with an emotional connection to our listeners, providing them with information, a laugh, some music and a chance to escape from the traffic jam on their way home. We have to continue to be their best friend who knows that they want more than a playlist from their favorite station. These are our historic strengths; this is the relationship that works for our advertiser partners and produces results. Radio needs to invest in and play to its strengths, even as we take advantage of our relationships in new technological ways.